How many kinds of manipulations? addnotwrong to b dirtyloser
seriously folks
Royal Bank laying a verbal beating on First Uranium, in spite of what is patently obvious about it having all the
best hot commodities.
Thetop producers, which make up nearly 90% of the market, producedabout110 million pounds of uranium last year. So essentially, theindustryneeds to produce almost four times that to meet the estimatednew demandthrough 2018. On an annual basis, the industry will need toabout doublein size.
A sidelight to this isthe fact that 63% of all uraniumcomes from just 10 mines. This meansthat the global supply of uraniumis susceptible to supply shocks. Ifone big mine floods or goes down forwhatever reason, it'll make a bigwave in the uranium market.
It gets even more interesting...
Mostof the best mines are already in production. As with everythingelse inthe resource world these days, the low-hanging fruit is allgone. Futuregrades will be lower, meaning we'll have to mine a lotmore ore to get agiven amount of uranium. New mines are in moregeologically challengingplaces. New supply is also coming from riskierplaces, such as Africaand Kazakhstan. All of this means that costswill go up.
These facts are reflected in the industry's cost curve, as you can see in the chart below.
Thistells you that at current production – about 130 million pounds –thoselast million pounds are a lot more expensive to produce than thefirstmillion pounds. It also means that as the industry ramps upbeyond 130million pounds to meet demand, costs will rise sharply.
Thereare 436 reactors in the world that provide about 15% of theworld'selectricity. The new reactors have fewer moving parts and aremuchbetter than the old ones. And most of the world seems to becomingaround to the green benefits of nuclear power; even PresidentObama'sadministration promises loan guarantees and other goodies forthebuilders of nuclear reactors. In our carbon-worried world, nuclearis arelatively clean source of energy.
Forall these reasons, wesee a massive buildup in reactors underconstruction, planned orproposed. The World Nuclear Association (WNA)says there are 52 reactorsunder construction, 135 reactors planned and295 reactors proposed. Thisis what underpins that demand we talkedabout up top. Where are allthose reactors going to be? Mostly, fromChina, India, Japan, and theU.S.
Once again,we have a resource story driven by China andIndia. Neither countryproduces much uranium. China produces less than2% of the world'suranium. If you believe "buy what China needs," as Ido, then uraniumfits well with that worldview. In conclusion, I want toown uranium.
Good investing,